Question

Playtime Industries manufactures custom-designed playground equipment for schools and city parks. Playtime expected to incur $664,000 of manufacturing overhead cost, 41,500 of direct labour hours, and $830,000 of direct labour cost during the year (the cost of direct labour is $20 per hour). The company allocates manufacturing overhead on the basis of direct labour hours. During May, Playtime completed Job 301. The job used 155 direct labour hours and required $12,700 of direct materials. The City of
Westlake has contracted to purchase the playground equipment at a price of 20% over manufacturing cost.
1. Calculate the manufacturing cost of Job 301.
2. How much will the City of Westlake pay for this playground equipment?